Event: the company released its three-quarter report in 2023, with operating income of 1.82 billion yuan in the first three quarters, + 0.37% year-on-year, 230 million yuan in net profit, + 242.29% in the same period last year, and 880 million yuan in operating income in the third quarter, + 5.18% in the same period last year. The net profit reached 150 million yuan, + 244.85% compared with the same period last year, and the performance exceeded expectations.
The stabilization of raw material prices and the decline in labor costs led to a substantial increase in gross profit margin, and the recognition of exchange gains and impairment losses significantly improved the company's net profit level: (1) strong domestic demand for chips and recovery of downstream construction plants; the company's on-hand orders were transformed smoothly, and the operating income in the third quarter was + 0.37% compared with the same period last year. Affected by factors such as the stabilization of the price of raw materials needed for the project and the decline in labor costs, the company's gross profit margin reached 17.5% in the third quarter, year-on-year + 7.2pct, higher than the average level in the past. (2) the sales / management / R & D / financial expense rates in the third quarter are 0.01%, 4.0%, 1.1% and 2.8%, respectively, compared with the same period last year. The larger change in the financial expense rate is mainly due to the higher exchange gains recognized in the US dollar account and the increase in interest income on time deposits due to the large capital balance. (3) the asset impairment loss in the third quarter was 51.83 million yuan, mainly because the company won the dispute over the construction contract with Hangzhou Zhongxin Wafer Semiconductor Co., Ltd. write off the impairment loss in the previous period; (4) the net profit in the third quarter was 150 million yuan, + 244.9% compared with the same period last year, and the net interest rate was 17.5%.
The balance of receivables decreased and the asset-liability ratio increased slightly: (1) the net cash flow generated by the company's operating activities in the first three quarters was 880 million yuan, + 145.5% compared with the same period last year. This is mainly due to the increase in the advance payment received by the company and the recovery of more previous project funds; the balance of bills and accounts receivable of the company was 310 million yuan by the end of the third quarter,-13.5% compared with the same period last year. (2) as of the end of the third quarter, the company's asset-liability ratio was 55.8%, year-on-year + 2.2pct.
In-hand orders fully protect the company's medium-term performance growth: in March 2023, the company announced major project orders, and the Singapore branch contracted for the expansion of the third / fourth plant of United Microelectronics Corp's 12-inch wafer fab, with a total contract amount of 4.568 billion yuan. as of mid-2023, the outstanding order balance of the company was 7.01 billion yuan. by the end of the third quarter, the company's contract debt balance was 440 million yuan, + 89.6% compared with the same period last year. The guarantee of on-hand orders fully supports the rapid growth of the company's medium-term performance.
Profit forecast and investment rating: domestic policies highly support the development of the semiconductor industry, and wafer manufacturers maintain high capital expenditure. Ya Xiang Integration is a leader in the domestic clean room industry with rich engineering achievements and a high reputation among customers. Singapore United Microelectronics Corp project orders will provide support for income and profit release in the next two years. We raise the company's 2023-2025 return net profit to 30,000,000 yuan 3.2 / 360 million yuan (the previous value is 2.0pm 2.4pm 260,000,000 yuan), and maintain the "overweight" rating.
Risk hints: the risk that the conversion of on-hand orders such as the Singapore United Microelectronics Corp project is not as expected; the risk that the capital expenditure of domestic wafer manufacturers is not as expected; the risk of intensified market competition.